South Korea central bank concerned over weak job market, household debt

SEOUL: Nearly all Bank of Korea board members remained wary of the coronavirus-hit labour market and rapidly rising household debt, minutes released on Tuesday of the Nov. 26 rate decision showed.

"The recovery in the labour market is unlikely to be materialised for a considerable period of time as small and medium-sized enterprises, self-employed and construction businesses with high employment effects remain sluggish," a board member said.

Two other board members added that targeted support to those, especially vulnerable to the coronavirus pandemic, should be continued.

Meanwhile, accumulating financial imbalances stemming from rising household debt should be constantly monitored and actively addressed, the majority of board members said.

"Surging household debt due to eased financial conditions created by the government and the central bank's efforts to counter the COVID-19 outbreak is worrisome," one board member said, as the seven-member board unanimously voted to hold its policy interest rate at 0.50pc.